More and more banks are luring customers with lure offers. Shutterstock
Banks are currently trying to attract new customers with high interest rates on money market accounts. Fintech Raisin has evaluated which banks are currently attracting attention with particularly high interest rates.
In many cases, however, these are bait offers. The high interest rates are only guaranteed for a few months.
It is easier, “when in doubt, to accept slightly lower interest rates, which then apply without ifs and buts,” Raisin CFO Katharina Lueth told Business Insider.
After years of zero and negative interest rates, the interest rates for call money accounts have risen sharply within a year. Up to 3.55 interest rates are possible, as an evaluation by fintech Raisin shows.
The problem: Often enough, the high interest rates are tempting offers from banks. The banks only guarantee you the interest rate for a certain period of time. After that, you fall back to the regular interest rate, which can be significantly lower.
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These 14 banks lure with lure offers
According to Raisin, most of these banks offer interest rates between 3.0 and 3.3 percent. After six months, however, you often only get less than one percent interest. You can see which banks pay which interest rate in this table:
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“The banks rely on the inertia of the savers, who in most cases do not switch to another bank even if the originally high interest rate is drastically reduced,” says Katharina Lueth, CFO at Raisin, to Business Insider.
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Lueth uses the example of Bank Santander, which currently promises you three percent interest – but only for six months, to calculate how drastic the fall in interest rates can ultimately have an impact.
Anyone who invests EUR 10,000 and expects three percent interest generally assumes interest income of EUR 300. But in fact, the interest rate falls to 0.3 percent after six months. At the end of the year you will not receive 300 euros, but only 165 euros in interest on your savings. This means that the effective annual interest rate is only 1.65 percent – and is therefore significantly lower than that of other banks.
Pay attention to the fine print
“I’m concerned about the trend towards lure offers for call money, because these practices are often confusing and non-transparent for consumers,” says Lueth. The banks reckoned that customers wouldn’t bother to calculate the APR. They also assumed that customers would not take their money to another bank even after the “lock interest rate” had been lowered. “It is therefore high time that the effective annual interest rate had to be specified for savings products in order to create comparability and transparency with savings products,” says the expert.
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Lueth does not believe that the lure offers will be equalized if the European Central Bank (ECB) raises further interest rates. In fact, they could have exactly the opposite effect: “This means there is scope to keep putting new and higher lure offers in the shop window. Overall, the level of both lure offers and overnight interest rates will probably simply increase,” says the financial expert.
“Accept slightly lower interest rates”
It is therefore particularly important for savers to pay attention to the small print, hidden information and the typical asterisks, says Lueth. In this way you can ensure that the advertised interest also applies to you and up to what amount it is paid.
“Savers should not take out additional products just to benefit from higher interest rates,” says Lueth. If you do take advantage of a lure offer, Lueth advises setting a reminder in your calendar so that you can switch banks again. “However, it is easier to accept slightly lower interest rates when in doubt, which then apply without ifs and buts.”